Kazakhstan Seeks Advantage Amidst Tough U.S. Customs Duties

Got the scoop on the recent brouhaha between the US and Kazakhstan! Trump dropped a bombshell, announcing a full-blown trade battle and whopping tariffs on you-know-who. But don't sweat it, folks, this 27% tariff is supposedly gonna hit Central Asia like a feather. Experts aren't losing sleep over it, though, suggesting it could even open doors for cozier cooperation between Astana and the White House.

The United States is only a miniscule piece of Kazakhstan's foreign trade pie, accounting for just 3%. Now, about 85% of your exports to the US, mostly oil, uranium, and silver, are off the hook in Trump's Executive Order. So, next time your neighbor asks you about the tariffs, you can tell them that only a teeny tiny percentage of your exports are affected. The Kazakh Ministry of Trade and Integration has got the rundown, stating that the new measures will only impact 4.8% of your total exports to the US.

But fear not, dear reader, because Kazakhstan has been keeping it classy, playing by the World Trade Organization's rules and having chats with the US about possible tariff exemptions. As for the experts, they're keeping it cool, Mississippi-style, predicting minor damage to your economy.

Aida Haidar and the research-savvy Darren Spinck, a think-tank whiz from the Henry Jackson Society, both agree on the minimal impact of the tariffs on Kazakhstan. Spinck explained, "It's all about flexibility and negotiation. Around 5% of Kazakhstan's non-energy or non-natural resource trade with the US is on the tariff hit-list. So, that's plenty of room to mend fences." Adding to the silver lining, he suggested that a tête-à-tête between presidents Kassym-Jomart Tokayev and Donald Trump could pave the way for an agreement that benefits both economies.

Financial analyst Andrey Chebotаrev chimed in, reiterating Spinck's optimistic outlook. He reckoned that "around 80% of our exports fall under special provisions. If you look at the fine print, oil, energy resources, rare earth metals, and ferroalloys are all exempt. These make up the major chunk of our exports."

In 2024, trade with the US hit a robust $4.2 billion, up from $3.05 billion in 2022. Exports to the US soared 30.6% to a whopping $2 billion. But the US still hasn't made it into the top five export destinations, which includes Italy, China, Russia, France, Türkiye, and Uzbekistan. Your exports to the US are mostly resource-driven, with mineral fuels topping the list, followed by uranium, silver, copper, and alloys, making you a key player in the US supply chain.

Room for Further Agreements

Spinck believes that the US could dial back those tariffs through negotiations, even laying the groundwork for deeper economic cooperation. "There's gold in dem thar woods, my friend. If the US and Kazakhstan reach a deal, it could open the floodgates for US investment in Kazakhstan and Central Asia, particularly in infrastructure, the Middle Corridor, and the mining sector."

However, some still wonder if the tariffs could push Kazakhstan toward the EU. Chebotаrev isn't too sold on the idea, stating, "The EU is our main trading partner already, and the US ain't even in the top ten. I don't see any major shifts or reasons for concern." Spinck agreed, adding that the EU's interest in Central Asia, especially in light of recent developments, could further dilute any potential leap of faith toward the EU.

The geopolitical landscape is looking mighty spicy, with the US, EU, China, and Russia eagerly eyeing their moves in Central Asia. Spinck noted that Russia won't be stoked about the EU's expanding influence, especially considering its stance on Ukraine. China, too, won't be pleased with increased US investment. In Spinck's view, Kazakhstan will choose partnerships based on the most favorable economic terms. With AI prowess and a less restrictive regulatory system, the US looks like a potentially attractive choice for investment.

As for Donald Trump's ironclad military stance, Spinck proposed an alternative perspective. He argued that the trade war is part of a larger, long-term strategy by the Trump administration, aiming to shape not only global trade but currency agreements and North Atlantic trade as well. He emphasized that this ambitious plan is both achievable and crucial for the US economy.

Lastly, the Eurasian Development Bank issued a statement, highlighting the potential risks for member states, including indirect consequences like currency volatility, trade disruptions, and reduced foreign investment. However, Kazakhstan's unique resource exports and potential for strategic partnerships put it in a relatively strong position. So keep calm and carry on, Kazakhstan! Because if history has taught us anything, it's that you're a resilient bunch who always bounce back.

Spinck, plus Aida Haidar, both suggest that the tariffs between the US and Kazakhstan are unlikely to significantly impact Kazakhstan's economy, due to the lower reliance on the US as a trade partner and the potential for exemptions in certain sectors like oil, minerals, and energy resources.
The tariffs, which were highlighted in the recent political news, could potentially lead to negotiations that result in reduced tariffs, opening paths for deeper economic cooperation between the US and Kazakhstan, especially in sectors like infrastructure, the Middle Corridor, and the mining sector.
Amidst the geopolitical tensions, Spinck expressed that Kazakhstan may choose partnerships based on the most favorable economic terms, with the US being a potentially attractive choice due to its advanced AI capabilities and less restrictive regulatory system, although the EU remains Kazakhstan's main trading partner.